JOHN DOE (Said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, and any arties, corporations or entities, if any having or claiming an interest or lien upon the mortgaged premises),

Defendants.

Index No. XXXXX/10

DEFENDANT SMITH’S

VERIFIED ANSWER,

AFFIRMATIVE DEFENSES

& COUNTER CLAIMS

Mortgaged Premises:

1000 4 STREET NEW HYDE PARK, NY 1040

SBL# 8-7-54; 8-7-55

Assigned: Hon. ­­­­­­­­­­­­&under;

Defendant Susan Smith, by her attorney, Susan Chana Lask, Esq., as and for her Answer to the Complaint of Plaintiff, respectfully answers as follows:

ANSWER TO PLAINTIFF’S FIRST CAUSE OF ACTION

ANSWER TO PLAINTIFF’S SECOND CAUSE OF ACTION

10.Defendant denies any and all other allegations and statements set forth by Plaintiff unless specifically admitted herein.

FIRST AFFIRMATIVE DEFENSE: No Standing

11.Defendant repeats and re-alleges each and every allegation contained in paragraphs 1 through 10 herein as if fully set forth herein at length.

12.References in these affirmative defenses to Plaintiff refer to Plaintiff’s assignors and/or predecessors in the event that there is valid claim of assignment of a previous mortgage to Plaintiff.

13.This action is brought pursuant to Article 15 of the Real Property Action and Proceedings Law to compel the determination of claims on real property hereinafter described.

14.That all times herein mentioned, Defendant was and is a resident of the State of New York, County of Nassau.

16.Upon information and belief, Defendant borrowed money by a July 9, 2004 Adjustable Rate Mortgage in the amount of Three Hundred and sixty Thousand ($360,0000) Dollars with IndyMac Bank, FSB, a Federally Chartered Savings Bank (“IndyMac”), and not with Defendant HSBC.

17.Upon information and belief, Plaintiff is not the true and lawful owner of said Note and Mortgage securing the same nor are any sums due Plaintiff thereunder.

18.Upon information and belief, Plaintiff and/or its respective agents, representatives, and/or successors has/have misrepresented the facts to deceive the court to obtain standing that does not exist as if Plaintiff is the owner of Defendant’s Note and Mortgage without alleging any legal assignment of the Note, or providing any other information regarding the alleged Assignment.

19.The Mortgage with Indymac at the top upper right corner lists “MIN: 0”.

20.That MIN designation means it is related to Mortgage Electronic Registration System (“MERS”); an entity known to destroy notes.

21.Upon information and belief, the original Note does not exist and did not exist to be assigned.

22.Plaintiff does not allege when or how the Note was assigned to it and omits any information that a valid assignment occurred.

23.Plaintiff’s complaint in itself proves a break in the chain of title and no valid assignment.

24.If MERS is involved it is established law that MERS is used as a nominee that breaks the chain of title and voids any assignment.

25.Plaintiff has no standing to maintain this action.

26.Accordingly, the action must be dismissed.

SECOND AFFIRMATIVE DEFENSE: No Holder in Due Course

27.Upon information and belief, the mortgage and note purportedly giving rise to this action was never assigned to Plaintiff.

31.Any Assignment Plaintiff may allege is fatally defective as executed by known robo-signer Brian Burnett, who is not a secretary or officer in any capacity for the company he claims to be when he allegedly executed the Assignment.

32.Upon information and belief, Burnett did not have authority to execute a purported assignment.

33.Upon information and belief, any Assignment is improperly and unlawfully notarized.

34.The Summons and Complaint is filed by known Foreclosure Mill attorney Steven J. Baum and his backend office Pillar Processing, closed for his unlawful foreclosure practices.

35.Baum drafted and filed this Complaint in conflict with all parties.

36.Baum, Pillar, and all parties involved, including Plaintiff together created this false, deceptive and fraudulent Complaint and any purported Assignment.

37.These deceptive and false practices of the attorney Baum for Plaintiff and any alleged assignee with all said parties being in conflict and robo-signing false filings prohibits standing of Plaintiff and mandates this Court to question the propriety of the transactions leading to the filing of this Complaint.

FOURTH AFFIRMATIVE DEFENSE: No Accounting

38.Plaintiff and its predecessors and/or assignors failed to give proper annual accountings of the funds contained in Defendants’ escrow account.

FIFTH AFFIRMATIVE DEFENSE: No Notice

39.Plaintiff and/or its predecessors and/or assignors failed to provide appropriate and required notices under the mortgage in question.

SIXTH AFFIRMATIVE DEFENSE: Missing Affirmation

40.Plaintiff’s complaint does not have the October 20, 2010 affirmation as promulgated by Chief Administrative Judge Ann T. Pfau and announced as an Administrative Order by Chief Judge Jonathan Lippman that Plaintiff’s counsel is mandated to provide an affirmation to the court showing that attorneys’ have personal knowledge that the documents and affidavits provided by Plaintiff were indeed signed by those who claimed to have signed it, as well as the documents and affidavits were signed in front of the notary claimed on the day claimed, and that the signer actually had personal knowledge of the facts they claim to have personal knowledge thereof.

SEVENTH AFFIRMATIVE DEFENSE: Failure to Verify, Culpable Conduct

41.Plaintiff, its agents, representatives, and employees, or its predecessors, failed to verify the income of the Answering Defendant.

42.Plaintiff, its agents, representatives, and employees, or its predecessors, failed to verify the assets of Defendant.

43.Plaintiff, its agents, representatives, and employees, or its predecessors failed to verify the employment of Defendant.

44.Plaintiff, its agents, representatives, and employees, or its predecessors, employed improper, inadequate or non-existent lender due diligence regarding Defendant’s ability to repay the loan secured by the mortgage giving rise to this action.

45.Excessive financing was extended to Defendant without regard to her reasonable ability to repay.

46.If Plaintiff sustained any damages or losses as alleged in the Complaint, all of which is expressly denied, then such damages were caused, either in whole or in part, by Plaintiff’s, or its agents, representatives, employers, assignors, and/or assignees, own culpable conduct, fault, and/or negligence, and any recovery herein shall be diminished accordingly in whole or in part.

EIGHTH AFFIRMATIVE DEFENSE: Documents Non-Existent

47.Plaintiff and/or its counsel did not possess the documents they swear they reviewed in their affidavits and pleadings filed in this court.

49.Plaintiff was never in the past, nor is it now, in actual possession of either the original note or mortgage because the Note and Mortgage were previously sold, assigned or transferred from the original lender as part of the mortgage securitization process whereby any rights incident to the note and mortgage were sold, assigned and/or transferred, either in whole or in part, to one or more third parties, with the mortgage and note being sold to a mortgage aggregator for further sale to an investment banking concern or trustee that assigned the mortgage and note to a tranche within one or more specialized investment vehicles (SIVs) in the form of a collateralized mortgage obligation (CMO) or collateralized debt obligation (CDO), using the mortgage as purported collateral security for one or more mortgage backed securities or in connection with a credit default swap tied to one or more CMOs, CDO or SIVs.

50.Upon information and belief, the original Note and Mortgage either do not exist or are possessed and/or owned in segments by one or more third parties that are not in privity with Plaintiff.

TENTH AFFIRMATIVE DEFENSE: Joinder

51.Plaintiff has failed to join indispensable parties, including the true owner(s) and holder(s) of the original Note and Mortgage and, upon information and belief, the investors who own parts of Note; all of whom have an interest in this action.

ELEVENTH AFFIRMATIVE DEFENSE: False Pretenses

52.Plaintiff and its representatives knowingly made material misrepresentations in their foreclosure complaint and other pleadings filed herein, sworn under penalty of perjury, and instituted this action under false pretenses.

TWELFTH AFFIRMATIVE DEFENSE: RPL §282 Fees

53.The mortgage contains provisions for legal fees that Plaintiffs seek in this action.

54.Defendant is entitled to her legal fees and costs under Real Property Law §282 which provides that all mortgage agreements giving prevailing lenders the right to attorney's fees must be read to grant that right to borrowers as well.

THIRTEENTH AFFIRMATIVE DEFENSE: Set Off

COUNTERCLAIMS

1. Defendant incorporates by reference all prior allegations of this pleading as if set forth fully herein.

2. Defendant is a natural person residing in the State of New York, County of Nassau.

3. The Mortgagee, Servicer and other parties misled Defendant since 2010 that it would work out the loan by forbearance, HAMP and other programs.

4. Defendant brings causes of action pursuant to the Uniform Commercial Code, UCC §3-305(a)(1)-(c), Truth in Lending Act, 15 U.S.C §§1601 et seq., the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. §§1602 and 1639, the New York Executive Law Section 63(12), New York General Business Law §349, Article 12-D of the New York Banking Law, and applicable regulations.

FIRST COUNTERCLAIM

5. Defendant repeats and re-alleges each and every allegation contained hereinabove as if fully set forth herein at length.

6. Plaintiff violated the Truth in Lending Act, 15 U.S.C §1601 et seq. by allowing Defendants to enter into a loan agreement which was wholly unsuitable for them.

7. Plaintiff or Plaintiff’s predecessor in interest violated the Truth in Lending Act by, among other violations, failing to provide Defendant with the appropriate number of Notice of Rights to Cancel and failing to accurately disclose the finance charges of the closing, violating 15 USC §§1635, 1639.

8. Plaintiff or Plaintiff’s predecessor in interest associated with the extended or offered the credit for which a finance charge is or may be imposed or which by written agreement, is payable in more than four installments, and is the person or entity to which that transaction is subject to this action and is initially payable, making plaintiff a creditor under 15 U.S.C. §1602 (f) and regulation Z 12 C.F.R. §226.2 (a) (17).

9. Defendant executed a promissory note and a mortgage which are consumer credit transactions within the meaning of 15 U.S.C. §1601 and regulation Z, 12 C.F.R. §226.

10. That transaction is governed by the Truth in Lending Act, 15 U.S.C §1601 and regulation Z, 12 C.F.R. §226.

11. The disclosure statement issued in conjunction with the consumer transaction never occurred and/or violated the requirements of the Truth in Lending Act and regulation Z as follows:

a. By failing to provide the required disclosures prior to consummation of the transaction in violation of 15 U.S.C §1638 (b) and regulation Z Section 226.17 (a);

b. By failing to make required disclosures clearly and conspicuously in writing in violation of 15 U.S.C. §1632 (a) and regulation Z §226.17 (a);

c. By improperly calculating the monthly payment and failing to include in the finance charge certain charges imposed by plaintiff’s predecessor in interest payable by defendant incident to the extension of credit as required by 15 U.S.C. §1605 and regulation Z §226.4, thus improperly disclosing the finance charge in violation of 15 U.S.C §1638 (a) and regulation Z §226.18 (d);

d. By improperly including certain charges in the amount financed which are finance charges, thus improperly disclosing the amount financed in violation of 15 U.S.C §1638 (a) (2) and regulation Z §226.18 (b);

f. By improperly calculating the monthly payment, thus improperly disclosing the total of payments schedule in violation of 15 U.S.C. §226.18 (g);

g. By failing to include in the finance charge certain charges imposed by Plaintiff payable to Defendants incident to the extension of credit as required by 15 U.S.C. §1605 and regulation Z §226.4 thus improperly disclosing the finance charge in violation of 15 U.S.C. §1638 (a) (3) and regulation Z §226.18 (d);

h. By improperly including certain charges in the amount financed which are finance charges in violation of 15 U.S.C. §1638 (a) (2) and regulation Z §226.18 (b);

12. By reason for the foregoing violations of the act and regulation Z, Plaintiff is liable to Defendant for twice the finance charge for each violation, but not less than $100.00 nor more than $1,000.00 for each violation; actual damages to be established at trial along with attorney’s fees and costs in accordance with 15 U.S.C. §1640.

13. Defendant is entitled to a set off of the amount of Plaintiff’s liability to them against the claim in the complaint.

SECOND COUNTERCLAIM

14. Defendant repeats and re-alleges each and every allegation contained hereinabove as if fully set forth herein at length.

15. In the loan transaction, Defendant did not receive accurate and truthful disclosures required by the Truth in Lending Act and Regulation Z of the Federal Reserve Board, 12 C.F.R. §226.1. Plaintiff has violated the Truth in Lending Act, Fair Debt Collection Practices Act and New York State General Business Law.

16. Upon information and belief, Defendant was not furnished with an accurate three day advance disclosure form required by the Homeownership Equity and Protection Act of 1994, three days prior to the loan consummation.

17. Based on the aforementioned violations, Defendant is entitled to recoup all payments made under the terms of the loan transactions and are entitled to statutory damages under 15 U.S.C. §1640, in the amount of payments made and damages in the amount of One Hundred Seventy-Four Thousand and Fifty Dollars ($174,050.00), for each claim.

THIRD COUNTERCLAIM

18. Defendant repeats and re-alleges each and every allegation contained hereinabove as if fully set forth herein at length.

19. Plaintiff violated New York Banking Law Article 12-D §419, breached its duty to mitigate its damages and to exercise good faith and fair dealing with the Defendants, causing damages equal to the amount of the loan.

20. Being that Plaintiff and/or its respective agents, representatives, and/or successors has/have received TARP funds; Plaintiff is a HAMP participant and has refused to qualify Defendant for said program.

21. Plaintiff multiple times from 2010 onwards misled Defendant that they would enter into forbearance, HAMP, “In-House Modification” and other agreements with Defendant that she complied; however, Plaintiff breached any agreement between the parties and therefore is not entitled to recover any alleged damages.

22. Plaintiff is barred from recovery by the doctrines of laches, waiver, unclean hands, accord and satisfaction, res judicata, statute of frauds, usury and collateral estoppel.

23. Specifically, Plaintiff comes to this court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief of foreclosure from this Court. The Plaintiff’s unclean hands result from the Plaintiff’s improvident and predatory intentional failure to comply with material terms of the mortgage and note; the failure to comply with the default loan servicing requirements that apply to this loan, all as described herein above.

24. As a matter of equity, this Court should refuse to foreclose this mortgage because acceleration of the note would be inequitable, unjust, and the circumstances of this case render acceleration unconscionable.

25. This court should refuse the acceleration and deny foreclosure because Plaintiff has waived the right to acceleration or is estopped from doing so because of misleading conduct and unfulfilled contractual and equitable conditions precedent.

26. Defendant prays for an award of damages for Three Hundred Sixty Thousand Dollars ($360,000.00) for each claim of actual damages.

FOURTH COUNTERCLAIM

27. Defendant repeats and re-alleges each and every allegation contained hereinabove as if fully set forth herein at length.

28. Upon information and belief, Plaintiff failed to comply with the foreclosure prevention loan servicing requirement imposed on Plaintiff pursuant to the National Housing Act, 12 U.S.C. 1701x(c)(5) which requires all private lenders servicing non-federally insured home loans, including the Plaintiff, to advise borrowers, of any home ownership counseling Plaintiff offers together with information about counseling offered by the U.S. Department of Housing and Urban Development.

29. The U.S. Department of Housing and Urban Development has determined that 12 U.S.C. §1701x(c)(5) creates an affirmative legal duty on the part of the Plaintiff.

30. Plaintiff’s non-compliance with the law’s requirements is an actionable event that makes the filing of this foreclosure premature based on a failure of a statutory condition precedent to foreclosure which denies Plaintiff’s ability to carry out this foreclosure.

32. Plaintiff’s failure to comply with the foreclosure prevention loan servicing requirement imposed on Plaintiff pursuant to the National Housing Act, 12 U.S.C. §1701x(c)(5) cause the filing by Plaintiff of this foreclosure to be in premature, in bad faith and a breach by Plaintiff of its obligation to Defendant to act in good faith and to deal fairly with Defendant.

34. Defendant repeats and re-alleges each and every allegation contained hereinabove as if fully set forth herein at length.

35. Upon information and belief, Plaintiff has charged and/or collected payments from Defendant, or is attempting to charge and/or collect through this action, attorney fees, legal fees, foreclosure costs, late charges, property inspection fees, title search expenses, filing fees, broker price opinions, appraisal fees, and other charges and advances, and predatory lending fees and charges that are not authorized by or in conformity with the terms of the subject Note and Mortgage which specifies the waiver of late payments and other collection charges as part of the forbearance and loan modification default loan servicing.

36. Plaintiff wrongfully added and continues to unilaterally add these illegal charges to the balance Plaintiff claims is due and owing under the subject note and mortgage.

I am the Defendant and homeowner in this foreclosure action. I have read the foregoing Verified Answer, Affirmative Defenses and Counterclaims. It is true to my knowledge, except as to matters therein stated to be alleged upon information and belief and as to those matters we believe to be true.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.